Medicaid Planning: More Vital Than You Think
By Barry Zimmer on July 16th, 2013 in Asset Protection, Elder Law, Incapacity Planning, Long-Term Care, Medicaid
You may think you don’t need Medicaid because your job provides you with health insurance, and because you will qualify for Medicare coverage as a senior citizen. Unfortunately this is an uninformed viewpoint.
A significant percentage of elder Americans receive assistance from Medicaid, because Medicare does not pay for extended stays in assisted-living communities or nursing homes. Since the cost of this kind of care is so high, many Americans quickly exhaust their life’s savings, and have no choice but to seek government assistance. Many of those people would say that they are middle class Americans.
This is a matter that is relevant to everyone. I would like to share a few details about Medicaid as it applies to long-term care for seniors in the form of answers to some common questions.
What is the upper limit of resources you can keep and still be Medicaid eligible?
The upper limit for countable assets is $1500.00 for unmarried Ohio residents. This varies state to state. There are detailed rules about what counts as a resource. Married couples can keep more resources (see below).
Does my home count?
No, your home doesn’t count if you are married, but there is an upper equity limit of $536,000 at minimum with each state having the option of raising it to $802,000. If you are not married, there is no protection for the home. However, there are some special exceptions that may apply to your house, depending on the facts and circumstances, and on your state’s law. You can also receive Medicaid nursing care benefits even before you sell your house, on the condition that you repay Medicaid when you sell the house and spend the remaining cash proceeds on your cost of care.
How about my vehicle?
The vehicle that you use for necessary purposes does not count when Medicaid is evaluating your eligibility.
Can my spouse keep half of the assets?
Yes, the healthy spouse can keep half of community assets (in addition to the marital home) up to a limit of $115,920 for Ohio residents. This varies from state to state.
Can I give my assets to my heirs to get below the resource limit, so I can get Medicaid?
Medicaid counts everything you give away without receiving something of equal value in exchange, generally within 5 years of applying. When you apply for Medicaid, you must produce bank and financial records going back 5 years. If you have made gifts within that period, then the value of the gifts is divided by the state’s average monthly cost of nursing home care (as set by the Medicaid agency), and that is the number of months that you are disqualified.
The rules are tricky, and the cost of even a minor mistake can be significant and irreversible. The information in this posting is just the tip of the iceberg. This is generally not the type of planning you should do without professional assistance.